TRUSTS IN THE FUTURE
I wish to correct any misconceptions that might have arisen from the article “Loss of trust” (November 24), which said the Government is tightening the screws on recovering rest home costs, and that family trusts set up decades ago are now considered “fair game”. It is correct that since 2005 the Ministry of Social Development has increased its expertise in assessing an individual’s or couple’s assets – including the effects of transferring assets to a family trust. However, the ministry does not “siphon off” assets from trusts. The ministry may require those who have access to resources to contribute to their personal cost of long-term rest home care. New Zealanders are expected to use the resources available to them before seeking assistance from the state. Residential care subsidies should be paid only to those who are eligible, based on need. The article makes it clear that a percentage of New Zealanders try to obtain Government funding for rest home costs by “masking” their assets. One suggested way of “masking” assets is to divide property between spouses under the Property (Relationships) Act 1976. This is unlikely to be successful because of specific provisions in the Social Security Act 1964. A “financial means assessment” includes the assets of the applicant and his or her spouse or partner, whether held jointly or separately. Placing assets into a family trust constitutes deprivation under s147A of the Social Security Act 1964. This means the excess gifting or ungifted transfers into the trust may be (and usually are) added back into the calculation when assessing eligibility. The ministry’s policy has been largely unchanged since 2005, when legislative changes actually benefited applicants by raising the asset threshold from $15,000 to the current $213,297. Before 2005, there was no “allowed gifting”. People who gifted to their family trusts had no guarantee that any gifts would be overlooked. The article is correct in relaying that there is one relatively recent change in practice – and that is to consider assessing the loss of income from assets put into a trust. The ministry has broad powers under the Social Security Act to consider methods or devices that are being used as an attempt to hide assets, or income, as deprivation. The ministry has tried to raise awareness in the wider legal and accounting community about the specific rules around the residential care subsidy. It is our responsibility to protect Government funds so there are sufficient services and benefits for those in genuine need.
General manager senior services,
Ministry of Social Development
Trusts were a valid mechanism for asset protection long before state welfare and ever-increasing costs for education, health, justice and, indeed, rest homes. Chartered accountant John Rowe says such costs can have a major impact on family wealth. To most families, “wealth” means a working budget or savings and, yes, having to pay does have an effect and often hardship follows. However, for those with family trusts, Rowe suggests it represents a “taking away” of assets and means of support: by whom? The rest of us taxpayers? Also, he says “intergenerational asset protection” (inheritances) and “asset growth” (potential for greater wealth) are taken away. Somehow, those with sufficient wealth to protect it by way of a family trust deem it perfectly reasonable to expect others to pay and so assist them to maintain and grow their wealth. Words like selfish and greedy come to mind.
During a career involving many years in Third World countries, I developed a cynical view of Western world pontificating about corruption in these places. The elite and the powerful take their cut; in some places it’s blatant, in others it’s dressed up in legalese. The article on family trusts is a wonderful example of how greed is dressed up in legalese.
FRONTING THE ISSUE
I’ve always suspected our creator has a sense of humour, and Douglas Lloyd Jenkins’s article on the problem of male underpants confirms it (“We have uplift”, December 1). God must find it hilarious that in the 21st century, men are still trying to design a garment that ensures the safety and comfort of those bits He created in a mischievous moment that are awkward and absurd yet vital to the continuation of the human race. The Scots fronted up to this problem centuries ago and it’s a wonder kilt-suits haven’t become fashionable in the city. We need Armani to think outside the box.
The article was as delightful as it was informative. I never knew there were so many different kinds of men’s underwear. Underpants that are too tight are like a small hotel – they have no ballroom! In my experience, however, it’s not the underpants but the trousers that are the main source of discomfort in the basement area, especially when sitting down. Just as in Are You Being Served?, the salesman always measures your inside leg right up to your crutch. Why does he not measure to a point a couple of inches lower, and make the zip longer, thus giving the wearer more room to manoeuvre?
Jane Clifton offers (Politics, November 24) succinct personality traits in the three contenders for Labour Party leadership. One, “disliked and mistrusted” by his colleagues, is arrogant; another, “mild-mannered” and “thoughtful”, has succeeded in mediating between genocidal warlords; and a third, a former diplomat with charm, can avoid alienating his colleagues. Someone who’s a bit bossy; a thoughtful mediator; a charming persuader … how to choose? The ultimate decision must be a response to the question: what characteristics do we want and trust in the person leading the country? I didn’t vote Labour, but my preference is that the leader of a party – as the potential Prime Minister – be characterised by intelligence and awareness; a willingness to take into account the needs and points of view of the widely differing sectors in society, and balancing those towards a fair and productive outcome; honesty and transparency in acknowledging and presenting our strengths and weaknesses as a basis on which to make genuine progress; courage to take a moral stance when necessary for the good of the people, regardless of any opposition from colleagues or others; dignity in representing us in overseas countries and forums; not feeling the “need” to be “one of the boys”; thoughtful, measured, well-considered decisions and policy actions. Why wouldn’t we welcome and revere such a leader? Won’t the answer be an indication of the level of maturity we have reached as a nation? What is behind the clamour for leaders to be showy, pushy and “out there”, vying above all else for votes, kissing babies and so on. Such a person can have little time or energy for standing back, truly sizing up a situation and coming to an intelligent conclusion.
Maureen Wempe (Letters, December 1) asks whether we’d like any of our current politicians to be president. Since most presidents, like our head of state, only need to nod and wave, I can think of one who fits the bill perfectly.
I agree with John Wilson (Letters, November 10) when he points out that heavier diesel trucks should pay much higher road-user charges because of the damage they do to the roads, but unfortunately he misses the point on the other issues I raised, which were principally about political incentives. If everyone got out of their SUV and drove a super-efficient small diesel, especially when commuting, wouldn’t our roads last longer? Wouldn’t our CO2 emissions be less? Yes, less tax would be reaped, but on that logic, we shouldn’t cycle or walk, either, because how would the highways be funded? Similarly, how do motorboat owners or lawnmower operators feel when they pay a road-user charge for fuel not destined for the road? The status quo is an outdated system. The whole system needs to be overhauled and brought into line with 21stcentury values – and quickly.
LEFT AND RIGHT
Surely a reader could expect opinions a little more nuanced, writing a tad more thoughtful and analysis a little more balanced than Bryan Gould’s one-sided diatribe (Books, November 3)? Take one example: Fox News is described as malign, distorted and fit only for a gullible public. Yet on Fox, a viewer can find prominent political analysts such as Karl Rove and Charles Krauthammer. Yes, they do interpret from a centre-right perspective. However, for many of us, they provide an excellent balance to the centre-left perspective of the rest of the mainstream media. Gould appears to believe that people of the right are by definition prejudiced extremists. If they were sensible people, they would, of course, be on the left and agree with him.
IN PRAISE OF POLICE
After watching yet another episode of TV’s Police 10 7, I am bound to express my revulsion at the regular screening of the foul-mouthed, abusive, aggressive, drunken offal with which the police have to deal on a daily basis. I can’t imagine what would motivate any young man or woman to join the police force, given that the law doesn’t always seem to back them, often handing out feeble, non-punitive sentences. Arresting some of these thugs and ugly, drunken women hardly seems worthwhile. I can’t express high enough admiration and praise for the officers who maintain politeness and dignity in the face of abuse and violence. They should be paid huge salaries.